10 Expert Tips for Saving on Car Insurance

My friend Lynn works for a major U.S. insurance company. I recently asked her for tips to help people save money on auto insurance. I expected maybe a few quick ideas, but she went above-and-beyond with the following detailed list. If you own a car, you should read these tips. For readability’s sake, I haven’t blockquoted this, but it’s all Lynn.

Note that every insurance company is different — not all of these ideas work everywhere. The first thing you can do to save money on auto insurance is to self-insure as much as you can afford. Do this in the following ways:

High deductibles. Everyone preaches this, yes, but it’s usually the easiest way to cut costs. Usually. (If your car is over ten years old, the savings may be minimal.)

Remove towing. Good maintenance and planning can save you money. Don’t run out of gas. Don’t lock your keys in your car. Make sure you have a spare and know how to change it. Sometimes your car will break down, but if your car is well-maintained, it won’t happen often. You pay $10 – $30 a year over the life of your policy and one tow costs $100. Note that in the event of an accident, towing is almost always covered under collision.

Remove car rental. Small economy cars cost about $20 – $25 per day to rent. Car rental is $20 – $40 per year. Play the odds. If you rent a car on vacation, your insurance will cover you while driving that car. Don’t pay for the extra coverage. The only things it offers are:

Zero deductibles. You go all year long with your deductibles, why change now? Also, if you pay for the car with a credit card, they may pay for any out of pocket in the even of an accident.

Downtime coverage. Downtime means that while the rental car you wrecked is in the shop being repaired, it can’t be rented out to other customers and they can ding you for the daily fee. This may be an issue if they can show that all other cars were rented out and they lost money because of you — Hawaii is notorious for charging this. But, again, it’s a risk you might decide to self insure rather than pay $21 a day for the insurance.

Aside from self-insuring, there are other steps you can take to save on car insurance.

Shop ahead. Before you buy your next car, check on insurance. Many people assume that SUVs are expensive and Neons are cheap. This is not necessarily true. Some companies will increase your liability based on the cost of damages your type of vehicle may inflict — big trucks cause big damage. However, they also rate the autos based on how likely they are to be damaged in an accident, how often they are stolen, and how badly driver/passengers are injured. That Neon (or Jetta or Honda) is going to be a lot more expensive than you think. Many companies will have websites that will give you lists of safe and lower priced cars. (Saturn is a low insurance car because it has dent-resistant doors.)

Think twice about after-market gizmos. If your vehicle is totaled or stolen, the insurance company will determine a fair market or actual cash value. They will look at your vehicle as a â€œwhole package.â€ Even if you paid for $3,000 in after market items (wheels, spoilers, stereos, exhaust, etc.) they may only add $1,000 in value to your vehicle. It’s not dollar for dollar.

Have all of your insurance in one place. Often, the more types of policies you have, the more you save in discounts.

Find out if your insurance company offers any low-mileage breaks that you qualify for.

Can you take a safety-driving course? Some companies offer a discount for this.

Do NOT pay monthly. Your carrier will charge anywhere from $3 to $5 per month for this type of billing. Pay every six months if possible. If you must pay monthly, do an auto pay — the charges are less because they only send a bill if the amount changes.

This might not be a money saving tip, but insurance companies are state regulated. They must file their rates with the state and be able to justify any increases these are public record as are any types of complaints or fines. For example, if you’re in Oregon, you can check out your company and/or agent at http://insurance.oregon.gov/.

Most companies now use aspects of your credit to determine your rate. It is illegal for them to do this mid-term — as long as your policy is continuous without any lapses, they can’t use external info to change your rate. They can only use claim and ticket info. However, all newly added vehicles can be affected by credit. If you have good credit, this may be to your advantage. You are allowed to request that they re-check your score once per year. However, whatever the score is, you’re stuck with it. If it comes back bad and it raises your rate: too bad. But, if you have a policy that was written when your credit wasn’t so great, request that they check it again after things look better.

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I disagree with removing the towing. My towing costs me about $6 a year. The rest of my insurance costs me about $460 a year (I have a 15-year safe driving record and have only used one insurance company in my lifetime) for full coverage. I would say review your policy and each cost carefully before cutting things.

I will say this if you don’t ask them for the discounts THEY WILL NOT TELL YOU THEY ARE THERE FOR YOU. Many of you have probably never asked and assumed you automatically got them. The answer to that is NO.

If you have been with a auto insurance company for 3 years accident and ticket free you should get a discount but again if you don’t ask you wont get it. If they don’t give it to you, shop around (i found $25/month at Insurance Panda).

If you are not working and don’t drive you vehicle like normal make sure they know this and when you get your vehicle inspected for you can be exempt for low mileage.

Bundling does help but not as much as you thin so the answer to this is shop around and make sure you get a letter for homeowners, auto etc… that you are LOCKIN on that deductible. Reason I say this and I wont say which company has raised their homeowners deductible since we have been having so many storms causing extreme damage. If you haven’t been with them and some less than 5 years your deductible was automatically raised and change, and you most likely weren’t notified so they don’t lose you as a client. SO EVERY ONE CHECK ON THAT.

One of the best ways to lower your auto insurance is to shop your rates around. Most people stay with the same insurance company their entire life. This can be costly unless your insurer gives big customer loyalty discounts. To save money, you should shop your rates around occasionally. Doing so can help you lower your premiums.

I wish I had $220 insurance. I am a 25 yer old male (24 last time I renewed my coverage) living in New Orleans (a city whose potholes are notorious for DESTROYING cars) with an accident on my record (I was 19). I’ve shopped and shopped and shopped. I pay every 6 months. I’ve managed to get my bill down to… $400 a month. yup. I am jeaslous of all of you.

In a nutshell, notify the insurance company that you use your car for leisure and not for commute, this makes a lot of difference. You ask for good drivers discount, have a multi discount, ask for low-mileage breaks and a safety driving course will certainly help. If our credit improves, check with your insurance and also with good record, some local insurance companies do sell cheap without compromising customer care.

The worst thing about driving is the cost; thereâ€™s gas, oil, the all-important CD player, and something that takes a really big bite out of your wallet – insurance. Everyone in the state of Washington is required to have basic liability insurance. Since you have to have it, here are some basic tips on how to get the best deal and save yourself (or your parents) some money.

I would agree with the above psoters. You have to work and get quotes every six months.. That is what works for me. Here in Michigan, rates seem to fluctuate quite a bit, and you can save by checking every renewal that you.

Wow, I knew that insurers could use your credit score to help them set your rates, but I didn’t realize you could ask them to recheck your score once per year. For drivers with good credit – or those who have been steadily building or rebuilding their credit – this could result in some easy and unexpected savings. Surely worth the temporary dip in score from the credit inquiry itself, I’d think.

I agree with the previous comment. A lot of times, changing something isn’t worth the risk. Changing my deductible from $500 to $1000 nets me a savings of less that $75 a year. Which means that it would take me more than 10 years at that cost to equal one deductible payment.

buy a car from a reputable used car person around your area- buy it cash – car payments are totally unnecessary- a decent car will go 200-300 thousand miles – if you are concerned about what others think, ask yourself, are they paying your bills?

and of course take public transportation whenever possible, bike and walk.

Trackbacks

[…] Car insurance is one of those necessary evils you can only live without if you don’t own a car. Even with a clean driving record you’ll still pay several hundred dollars every year, in some cases a couple hundred dollars per month. The most common tip I’ve seen for reducing car insurance bills is to raise the deductible. Many other factors play into how much you pay and with careful examination of the bill, you can drop your rates even further by eliminating stuff you don’t really need. Over the life of owning a car, these dollars start adding up. Get rich slow offers advice from someone who works in the insurance business on how to cut cost on car insurance. car insurance […]

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My name is J.D. Roth. I started Get Rich Slowly in 2006 to document my personal journey as I dug out of debt. Then I shared while I learned to save and invest. Twelve years later, I've managed to reach early retirement! I'm here to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you get rich slowly. Read more.

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